An analyst employed at a commodities trading firm wanted to explore the relationship between prices of grains and livestock. Theoretically, the prices should move in the same direction because, as the price of livestock increases, more livestock are bred, resulting in a greater demand for grains to feed them. The analyst recorded the monthly grains and livestock subindexes for 1971 to 2008. (Subindexes are based on the prices of several similar commodities. For example, the livestock subindex represents the prices of cattle and hogs.) Using a graphical technique, describe the relationship between the two subindexes and report your findings.

  • CreatedFebruary 03, 2015
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